Daily_Nifty_VP's View-31/07/12

LEADER POST for Tuesday (31/07/12)

1.         The supports are at 5194/93, 5184, 5176, 5151 and 5139 while resistances are at 5202/04, 5209/10 and 5219. A likely bullish flag gets nullified below 5184. The target will be known sometime after Tuesday's movement of nifty. Three likely -WWs give about 5172 (once below 5189) and 5048 & 5044 (once below 5180 & 5155). A rising wedge seems to have formed, which, if true and breaks down, gives appx. 5077.

As mentioned in the last post for Monday (30/07), the day candle shows a bullish tendency. However, Tuesday is the day of RBI policy review. Good or bad news from RBI may see break out above crucial level of 5250 or break down below 5150, which would be bearish. Note that there is a gap created on 12/07 (5306), which could be filled up in case of a break out. Always avoid trading on an important event day as RBI policy review or at least trade with caution and SLs.

2.         As it appears now, SLs for positional shorts and longs seem to be 5260 and 5150NS.

3.         PCR at 1.05 VIX at 16.60.

4.         AS PER 9.30 STRATEGY, SELL ABOVE 5234NF, TARGET 5203/5184 SL 5264.

5.         An inverted flag can give 5162NS.

6.         First target achieved.

7.         (Post by LLK) -ww target of 5172 achieved.

8.         Inverted flag target also achieved.

9.         Nifty opened up with a gap again taking cue from Monday's bullish candle and sentiment. It closed +ve and also above Monday's close. But as indicated by the pre-open candle, it was volatile, thanks to RBI policy review. It fell about 60 points after opening and then recovered smartly by about 78 points.

The first -ww target was met during the fall. Both the targets of 9.30 strategy were met but without giving an opportunity to enter into a trade at specified level, which came only after target was met. A bearish flag identified later also gave its target. Nifty closed with indicators at ovebought levels and in -ve div.

The intraday chart of nifty spot values with 5 min candles is shown below.